Could people power get you a cheaper energy bill? The Big Deal wants us to join forces to demand lower gas and electricity prices

Energy bills have more than doubled in the past decade, and the Big Six firms have raised prices by eight times more than most people’s pay has increased.

Prices are only going to go higher, so it has never been more important to get the best deal.
Yet despite rising power prices, new research shows that the number of people switching to rival firms has fallen dramatically.

In 2008, 9.6million gas and electricity deals were moved from one company to another. But in 2012, just 5.6million were switched. And the full year figures for 2013 are expected to be even lower when they are released.

Power to the people: The Big Deal wants people to sign-up for energy switching en-masse, so it can fight for a better collective deal from suppliers.

Those who regularly use comparison websites to check tariffs — the so-called ‘rate tarts’ — often switch suppliers and/or tariffs every year, and sometimes more than once a year.
Yet industry figures show that seven in ten consumers have never moved their energy deal.

Meanwhile, the energy firms are getting richer: profits have more than quadrupled since 2009, making them more than £1billion a year extra.

The Government has tried various measures and threats to get the energy companies to pass on savings — but with limited impact. This week, new-style bills were announced that will show households precisely what they are paying.

Now, though, a fresh initiative is set to help those who have never switched tariff to get a cheaper energy deal. It plans to do this by using ‘people power’ to convince the firms to offer a lower tariff if tens of thousands of homes all switch at once, en masse.

HOW CAN THIS HAPPEN?

A new company called The Big Deal, which launches today, wants to encourage thousands of people to register to switch their energy.
When enough have signed up, it will go to all the energy suppliers and ask them to bid for these customers by offering a cheap energy tariff.

Whoever makes the best offer wins — and customers who registered will be given the opportunity to switch across.
It is hoped this will save consumers hundreds of pounds a year, because the tariff they will get could be cheaper than any other deal on the market that day.

If this happens, then people power, through this collective buying method, will have forced down the cost of energy.

Henry de Zoete, co-founder of The Big Deal, says: ‘People think the energy market is stacked against them. Energy bills keep going up and people are having to make sacrifices.

‘They don’t trust the Big Six to give them a good deal nor do they have faith in politicians to help them. It’s time to take action ourselves. By joining together we can all get a better deal. More people means lower bills.’

You can sign up from today, and for the next eight weeks. Negotiations with suppliers will take a fortnight and customers will then have two weeks to decide whether they want to take up the offer. A mass switch will happen at the end of this time, which is likely to be June.

Higher and higher: Energy bills have more than doubled over the past decade

HAS IT BEEN DONE BEFORE?

Collective buying is not new: local councils regularly negotiate deals with suppliers. The biggest of these was by Oldham Council, which saved 5,084 people an average £126.
The largest saving by a local authority was £200 per average user, struck by Nottingham City Council.

In 2012, consumer campaigners Which? asked readers to sign up for its Big Switch. It got 287,365 households to register and then haggled for a better deal with five suppliers.
But big names such as British Gas and Npower did not take part in the bargaining process.

In the end, 37,000 switched tariffs, most onto a rate set by Co-operative Energy; others were moved onto a deal with EDF Energy.
The average saving for those who pay by monthly direct debit was £119, with £183 for customers who pay by cash and cheque.

The biggest switch so far has been in Australia, where its Daily Telegraph newspaper organised for 250,000 to move their tariff. These households got an average 16.5 per cent reduction in their bills.

And just this month, Asda Money teamed up with price comparison website Energysavinghelpline to launch their own Big Energy Switch campaign.
Its registration period has ended, and the 50,000 customers who signed up are waiting to find out what deal they are going to get.

The Big Deal wants to build on the success of these schemes and says that it has already been in discussions with some suppliers in the hope that what it offers will be even more competitive.

ARE THERE ANY DOWNSIDES?

As this is a collective deal, it is probably not going to be the very best for your personal circumstances. Your cheapest tariff will depend on your lifestyle, type of house and where you live.

So, the best way to guarantee you have the cheapest gas and electricity deal is to switch supplier and/or tariff frequently using a comparison website.

After its Big Switch in 2012, Which? was criticised because the Co-op offer was not the cheapest on the market at the time, and lower tariffs were available during the drawn-out negotiating period.

In Australia, there were complaints about poor customer service caused by so many people moving deals at the same time.

The Big Deal registration process is also very drawn out, and anyone who signs up today will have to wait at least three months before they get a cheaper deal. If you switched energy supplier using a comparison service, you’d have a new tariff within four to six weeks.

The Big Deal is a new company and nothing on this scale has ever been tried before.
It promises it will have enough staff to answer questions and to register switches — but at times when it receives more calls than it can answer, customers will have to leave a message on an answering machine.

There is no guarantee that a good deal will come at the end of this or that all the big suppliers will take part in the auction of details.
However, any deal offered should be better than the rates most people are on now — and there is no obligation to accept what is offered.

You will also need to check with your existing supplier because if you are in the middle of a fixed-term contract you may have to pay an exit penalty of around £30 per fuel to leave early.

Perhaps the biggest question mark over this offer is whether suppliers can cope with switching hundreds of thousands of customers at once.

Smaller companies such as Ovo and First Utility routinely offer the cheapest deals — but Money Mail is inundated with complaints about the service offered by First Utility.
Ovo has a better service record, but only 200,000 customers.

To take on thousands more overnight could put a huge strain on its business.
Even the Big Six — EDF Energy, British Gas, Npower, E.on, Scottish Power and Scottish & Southern Energy — who spend millions on customer service, have had problems in recent years.

Mr de Zoete adds: ‘The more people who join, the stronger the collective purchasing power and the bigger the savings it will be possible to achieve.’

WHAT DOES THE BIG DEAL GET OUT OF IT?

The Big Deal has been set up by Henry de Zoete and fellow businessman Will Hodson. Mr de Zoete is a former government adviser who worked with Education Secretary Michael Gove.

Mr Hodson, a technology entrepreneur, has worked for Consumer Focus, a body that challenged fair play at the energy companies.
The Big Deal will take commission for every person who is moved to a new tariff, though it won’t confirm how much.

Which? received around £40 per person it switched, and it is likely The Big Deal will make a similar amount. This is roughly the same fee that comparison websites pocket if you use one to switch deals.

You won’t have to pay the fee upfront: it will be passed from the energy supplier to The Big Deal. The company plans to use some of the cash it raises for other collective bargaining deals in the future.

WHAT HAPPENS IF I WANT TO SIGN UP?

You can register your interest free at thisisthebigdeal.com or by calling 0333 222 5871. Calls are charged at standard national rate and will be included in any free calls package. You can also sign up via Facebook.

You will have to give your name, postcode, email or phone number, the type of home you live in (ie, flat, semi-detached), the number of occupants, your current supplier and how much you pay.
You’ll also have to say whether you pay for gas and electricity combined or get them from separate suppliers, and how you are billed (by monthly direct debit, quarterly cash or cheque, or by prepayment meter).

Every week, an update email will be sent to those who registered online. Once the negotiating period ends, customers will be told what deal has been struck. This will include the price and how long the deal lasts.

What The Big Deal negotiates is likely to be a fixed price deal that protects against future price rises. There should be different tariffs for the three different ways of paying bills.
You can then accept or decline the deal. If you accept, the new supplier will be notified and The Big Deal will have a team of experts who’ll help you switch.

If you didn’t sign up initially, you can’t suddenly sign up for the tariff offered after the registration period has ended.

HOW DO I FIND THE BEST DEALS AVAILABLE?

The cheapest fixed-rate tariff on the market is Ovo’s Cheaper Energy Fixed 12-month deal. It will cost the average household using 13,500 kWh of gas and 3,200 kWh of electricity £1,015 a year. There is a £30 per fuel early exit fee if you switch away before the year is up.

For £71 a year more, customers could benefit from another four months’ price protection by signing up to Npower’s Online Price Fix June 2015 deal at £1,086. And there is no cancellation fee.
Sainsbury’s Energy offers the longest fix, lasting until March 31, 2018, and costing an average £1,316 a year. There is a £50 per fuel charge to leave early.

IS IT TIME TO SWITCH? HOW TO DO IT YOURSELF

Energy
price tariffs are in a constant merry-go-round with suppliers
constantly battling to pinch customers - you - from each other.

Shrewd consumers can take advantage of
this by doing exactly that - moving deals every six months to a year to
ensure they are on THE cheapest deal. Even moving every other year will
save you significant amounts.

Suppliers offer their cheapest rates via online tariffs so if you're ready to switch, it will certainly pay to do so.

If you are one of the millions of
people who have NEVER switched (i.e. stuck with your original
supplier), then you will DEFINITELY save a big chunk of cash, possibly
as much as £300 a year.

Prices
are different all over the country and the cheapest supplier for you
will depend where you live. You only need to be interested in the tariff
that is going to be cheapest where you live, so do your own comparison to find the best price.

For full details of how to switch your provider and where to find the best deals check out This is Money's guide